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How can I get a loan with bad credit?

Mon 24 June 2019

How can I get a loan with bad credit?

A bad credit history may make loan providers worry that you will struggle to repay them each month - as they use past habits shown on your credit report to predict future behaviour. However, even if you have a bad credit record, there are ways you can improve this to increase your chances of getting the loan you need.

It is also important to note that while a bad credit rating may limit you, it doesn’t mean all companies will refuse to lend to you.

What does having a bad credit rating mean?

Having a bad credit record can mean fewer companies will be willing to offer you a loan or they may offer you a smaller amount. This may be a result of current or past debts, being paid late or missing payments, or having been declared bankruptcy. Not having much credit history at all can also hinder you, making it difficult to assess how reliable you are with your finances.

If your credit report shows you typically fail to keep up with loan repayments, your credit score could be negatively impacted.

Different companies have different criteria for lending, which is why doing your research before you apply for any loans can improve your chances of securing a loan.

Improving your credit

If your loan is not required for an emergency, improving your credit rating is the best way to increase your chances of getting the loan you need. You can begin to do this by ensuring you make all your repayments on time, and by not applying for any new credit in the meantime. This will slowly build up your score and show lenders you are reliable.

If you have ongoing debt such as a credit card, it may help to create a realistic plan for how you can start paying back what you owe in monthly installments. Stick to the plan by paying on time and watch your credit score slowly climb back up.

It is a good idea to check all your personal details are accurate by checking your credit report, so you can correct any mistakes before you start sending off applications. By viewing your credit history, you can take note of what is affecting your credit and where you need to make improvements.

Make sure there has been no fraudulent activity under your name, and that you are on the electoral register, as this can also improve your chances of being accepted for credit.

Finding the right loan for you

Using a loan eligibility checker can be helpful when searching for a loan – it allows you to find out in advance which lenders are more likely to accept your application before they do a full credit search. If you make a lot of credit applications you will have a lot of searches input on your credit report. These leave a record for up to 12 months that lenders can see, which may damage your chances of being accepted for credit further.

Before applying for a loan, it is a good idea to figure out what you can realistically afford to pay back each week or month,. This will help to stop you from getting behind in future with your payments and further damaging your credit score.

Understanding what the interest rates are for the loan you choose and how they will impact the amount you pay back is also important. If you have a bad credit record, it is very likely you will have higher interest rates on any loans you are accepted for. This can further increase the debt if you cannot afford the fees, so do your research carefully.


There may also be options to get a co-signer or guarantor for your loan. They will agree to pay back your loan if you are unable to, which reduces the risk for lenders and increases your chance of approval. This should be somebody you trust who has a good credit history. Be aware that if you don’t make the repayments , it will impact their credit score and could cause damage to your relationship.

Credit Unions

Credit unions are another potential option for those with bad credit. A credit union is a community of members who have something in common, such as living or working in a particular area. They are owned by the members and can be a way towards getting a loan with a lower interest rate.

If you find a credit union near you, you can apply to become a member and take advantage of the services they offer, including savings accounts and plans to help you take control of your finances.

Looking at the different options available will help you make an informed decision about the best way to find a loan that suits you, and one that you can comfortably afford to pay back. Even with a bad credit history, it is possible to find a loan for your needs, and as long as you stick to the agreement, you can repair your credit record again as long as you pay back the agreed amounts on time.

Morses Club Loans

Morses Club provides small cash loans. We may be able to accept customers who have a bad credit history or have been rejected by other providers, but this is not guaranteed. We will run credit checks and meet with you face to face before we decide whether you are eligible for a loan. If you have been looking for bad credit loans, visit our how it works page to find out if a Morses Club loan is right for you.

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